China starts probe into pharma pricing

Days after beginning an investigation into price-fixing of infant milk by foreign companies, China has turned its attention to the pharmaceutical industry, both domestic and international.

The country's National Development and Reform Commission has begun an inquiry into pricing practices at 60 drugmakers. News of the investigation came from the Chinese government's Securities Daily newspaper (reported by Reuters) which stated that the NDRC will examine 27 companies on cost issues and 33 for pricing.

The companies that are mentioned as being involved in the probe include GlaxoSmithKline, Merck & Co, Astellas, Novartis's generics unit Sandoz, Boehringer Ingelheim, Baxter International and Fresenius. Other reports say that China's Sinopharm and Jiangsu Hengrui Medicine are also under investigation.

An investigation team from NDRC will reportedly visit the companies involved between July and October. The move is being seen as part of China's bid to make healthcare more affordable and pushing prices down.

Ben Cavender of China Market Research Group in Shanghai told the BBC that it is not surprising that there is pressure on pharma and the infant formula sector, noting that consumers' trust in domestically-made products in these segments is very low. He added that this is "driving consumers to spend extra to buy foreign products", and given their higher prices, it has become "a social issue", raising concerns about safety.

Earlier this week, in an unrelated investigation, it was reported that senior staff at GSK in China had been under police investigation following accusations of fraud and bribery.